Rumor: FTC Likely to File an Antitrust Lawsuit to Block Microsoft's Activision Deal - News
by William D'Angelo , posted on 23 November 2022 / 6,503 Views
The Federal Trade Commission in the US is likely to file an antitrust lawsuit to block Microsoft's proposed $68.7 billion acquisition of Activision Blizzard, according to three sources with knowledge of the matter who spoke with Politico.
If the lawsuit goes through it would be the biggest move by Chair Lina Khan. However, it isn't guaranteed and the four commissioners at the FTC have yet to vote out a complaint or meet with lawyers for the companies, according to two sources. The sources say FTC staff have reviewed the deal and are skeptical of the companies' arguments.
FTC's investigation into the proposed deal remains ongoing, however, much of the research is complete. This includes depositions of Microsoft chief executive Satya Nadella and Activision head Bobby Kotick, according to the sources.
It is possible if the FTC moves ahead wit the case it could be as soon as next month.
One of the main concerns from the FTC is if acquiring Activision Blizzard would give Microsoft an unfair advantage in the video game market. As of right now, Microsoft's Xbox is in third place behind Sony's PlayStation and Nintendo's Switch.
Sony has been the main company against the deal from the start. Sony Interactive Entertainment in a newly published response to the Competition and Markets Authority (CMA) of the UK claims Microsoft will raise prices of its consoles and games as it would face weaker competition from PlayStation.
Sony has also claimed that Microsoft's strategy is for PlayStation to become like Nintendo and to no longer able to compete in the shooter gaming market. Microsoft has previously stated Nintendo has been successful despite not having Call of Duty on the Switch and argues Sony could be successful without the franchise as well.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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First - Highly unlikely in US law
Second - 'blocked' usually means 'conditions added' not stopped
Agreed, especially since the FTC didn't say anything about AT&T buying Warner Brother and then selling it to Discovery Communications just a few years later and that was a much bigger deal since there are fewer media companies, than software companies.
Yes I did not bother to comment first when I saw all the ‘hope it is true’ but if it is is true (very unlikely) it will be for concessions like having COD staying multi platform not ‘block’ the deal…
The FTC filing suit doesn't mean anything on its own. The FTC cannot block the merger. They can only ask the court to block the merger. If they do ask the court to do that, it'll be settled with some concessions, not blocked from happening at all.
Nearly 100% of business disputes in the US are settled. Nothing goes to trial.
This ol acquisition is taking forever and made so much drama. Meanwhile i feel like it was way easier for Disney to buy any of their recent big acquisition, like Fox, which was MASSIVE and put them in an almost monopoly state.
I still cannot believe they let Disney to buy Fox.
But they had to make sacrifices (like the network, still owned by Murdoch I believe)
Worst case scenario is they have to divest CoD. Microsoft is already setting that possibility in everyone's mind by downplaying the importance of CoD and saying it's about mobile
Another possibility is that MS just buys King, or maybe King and Blizzard, and leaves CoD with Activision.
And this has been moved to the top of the news because?
This deal is never gonna push thru is it?
People be stopping it left right n center
Imho... hopefully this deal will be stopped, or at least ABK will keep going full multiplatform.
Why? It's good competition. Sony needs competition not less of it
MS: they can spend money to create some New stuff. Just imagene the amazing games Xbox can make with something like 30Bi, some great stuff can come to life.
Sony: they keep ABK stuff.
MS gains alot with ABK, but Xbox gamers gain nothing New while Playstation loses ABK stuff.
Imho, the best for PS and Xbox gamers is for this deal to fail and MS puta money at Making New ips, New Studios and great new games.
What's better?
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A- You can have ABK stuff as always, multiplat, and exclusive games from 4-6 New Xbox AAA Studios.
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B- You can have ABK as exclusive, but CoD still on Playstation for the next 10 years.
I think A is best option, hands down.
They won't use the money on new IP if the deal fails, they will turn around and buy a whole handful of smaller companies that also have an impact on Sony. Who's to say they wouldnt turn around and buy Square Enix, Capcom and Bandai?
Let's talk about that when the time comes and not excuse a real scenario with a fictional one.
No, they won't. It has to fit their strategy, and they say they want King to enter into the mobile space, but they really want COD. NA is their biggest market by a long shot, they're not going to suddenly start spending billions on Japanese developers. A much more realistic target would be Take Two. They have GTA and Zynga.
Abk has alot of dormant franchises that can be revived and make new games. I am sure developers want to create new ip outside of cod which they can under ms. Those ip will make bank in go
It takes time to create new studios which involve hiring people. Its faster to just buy them and get them to make new ips. Sony bought many studios during ps1 and 2 days. They didn't just have those studios built up from scratch.
Remember Sony has been in the console business for a much longer period then ms. When ms joined Sony was already we established. To be fair xbox 360 challenged Sony with their ps3 and that was ms second attempt. I admit they screwed up with xbox one but they are clawing back with series x and a with gamepass. Gamepass is best thing that has happened in the gaming industry and the most consumer friendly
Would prefer publishers only be purchased by companies that will keep all the games PC and console multiplat.
If MS keeps saying that COD is not a big deal in this purchase then remove it from the purchase or put in writing that COD will always and forever be console multiplat. Not 3 or 5 or 10 years but forever.
That's an interesting rumor. I had no doubt it would pass.. now I'm curious.
I hope the deal falls through . I don’t want any of the bigs buying out publishers!!!
Wait, deposition of Bobby Kotick?
Highly doubt its true since the FTC didn't file an antitrust lawsuit against AT&T when they bought Warner Brothers or when they sold it to Discovery Communications and that was a much bigger deal since there are a lot fewer media companies, than software companies.
I don’t see an issue with the takeover. Someone is always going to be number one and someone needs to be number three. Sony is just making a helleva lot of noise because they’re threatened to lose the number one spot. Perhaps they shouldn’t rely so much on third party support.
Sony aren't even #1 in the market in question. Tencent is. Sony is saying a lot because if certain series and games are taken from their infrastructure, it means a lot of lost revenue. The Playstation brand is Sony's biggest revenue stream, Xbox is not for MSs.
Microsoft seemingly implied that they don't care about anything but King. They can simply agree to sell Call of Duty to PlayStation (with a 10 year deal to keep it multiplatform), as they've claimed to not fear competition. Problem solved!
Good, hope its true
Nah, I'm more of a salmon person
Everyone has cod now?
Nothing will change then if deal goes through. Only thing is the games be on gp.
Pretty sure you mean everyone will lose cod.
How so when Sony were offered 10 years of cod and they want switch to have cod
Excellent, hope it turns out to be true.
Doubt it the FTC didn't say shit when AT&T bought Warner Brother or when they later sold if off to Discovery and that was a much bigger deal since there are way fewer media companies than software companies.
However buying AnB doesnt make Xbox the biggest gaming brand.. yet
The comment wasn't about the scale of the AnB deal or whether or not it should go through, it was about how the FTC's different leadership now means that the larger AT&T going through under the old FTC isn't necessarily going to carry as much weight when it comes to future decisions than it once would .
I think your assessment is off (respectfully). ATT buying Warner didn’t create less competitors; it only changed who owned them. Even more importantly, it didn’t do anything to harm any of the competition. The biggest difference in the ABK situation is the fact that this will, in at least some ways (how many depends on the regulation), directly negatively affect Microsoft’s competition in regards to profit. It also just generally gives MSFT a large amount of power. Sony’s market cap is only around $105bil—only $36bil more than what MSFT is trying to buy ABK at.
Also, you mentioned there being way more software companies than media companies, but that’s not really what this is about. The concern isn’t for the software companies like 2K, Ubi, etc; it’s for the console creators, of which there are only 3. And when speaking about actual direct competitors to MSFT, it’s only Sony. So I think this is a much bigger deal than the ATT Warner buyout.
The fact is the news impacted their Market cap and is the main reason it is or was only 36 billion more than the ABK deal . We can equate the stock not rebounding to the present market but it feels somewhat disingenuous to say yes it dropped when the deal was announced but most of that loss was due to the market.
"One of the main concerns from the FTC is if acquiring Activision Blizzard would give Microsoft an unfair advantage in the video game market"
The market has always been unfair to someone.
Thats because thats Sonys only realistic option. If Sony had the same cash reserves as MS, they would have done the exact same thing and many on this website will think its perfectly fine.
To whom Nintendo, last time I checked all the things Sony does, so does Microsoft. Buying independent studios check, moneyhatting content check (they have done that plenty of times in the x360 era and Xone era). People seem to forget that MS already owns more studios then Sony. So in what way is MS getting bullied. Buying established publishers and making third party ip's first party is pretty much a move MS made, not PS. Or are pretending that Doom, Wolvenstein, Elder Scrolls etc. are still going to release on PS.
So Sony bought all the authorities in the world, what a rich and corrupt company. /chuckles.
When the CMA decision refers to "Sony" 70 times versus 14 for "consumer," can you really blame the fan for wondering who those entities are actually trying to defend here?
https://assets.publishing.service.gov.uk/media/634536048fa8f5153767e533/MSFT.ABK_phase_1_decision_-_1.09.2022.pdf
Who said all? I mean I believe your English is good enough to be able to read CMA documents. It is pretty obvious that they are both playing hand to hand. But nobody said anything like that about FTC or even the EU. Stop making things up please.
And yet those are also going more and more strict with MS. And seems like China have already put itself against it.
Again, this has nothing to do with what you said about people pretending that Sony bought authorities. Nobody said that. This is just about how the CMA (UK only) is dealing with this and hand to hand with Sony. Having authorities checking this deal so closely was expected from the start and nobody is surprised or call them bought by Sony. So, if you want to be salty about it, at least refrain it to the CMA, don't make up anything else about other authorities or the fact that it is 100% normal that they are looking deeply into that, those are 2 completely different things.
Seems like you missed the several tweets accusing Sony of having outright bought the CMA. And there is also a lot of tweets overflowing with anger and salt about the other agencies being strict. Myself I lose nothing even if ABK deal closes and MS decides CoD is to be interrupted immediately on PS consoles.
The first 3 words of my response to YOUR comment about Sony buying ALL authorities: "Who said all?"
Yes, people, in general, believe that the CMA is in Sony's pocket. YOU on the other hand pretended that people, in general, were talking about "all authorities" in the world based on one tweet or two you saw that are not even related to this article. You are making this up (no matter if you saw a tweet or two about it, you are just generalizing it like it is even a thing...).
And I'm telling you people claimed Sony bought EU and others AS WELL.
Ya know what i hope the deal fails and Ms give them Sony fans what they want. Spend that 60B on time hatting all them games (Who knows how many of them will be games Sony fans do care about). Use that money to buy smaller devs and publishers such as Sega and SE etc. I bet if this deal fails thanks to Sony crying about it MS are not going to be happy and will go after PS where it hurts and them Sony fans will get exactly what they are asking Ms to do with this money so its a win win.
You're applying human emotions to faceless mega corps. Microsoft don't get 'unhappy' and start spending billions. Sony don't 'cry'. That's not how business works. Microsoft have been trying to go after PS where 'it hurts' since they shipped the first Xbox. Their goal for the past 20 years has been to beat PlayStation. And COD is where it hurts, COD is what makes PlayStation billions. That's why there is this much focus on this buyout.
I think they will continue to pursue large scale acquisition that fits with their strategy of expanding streaming services with select acquisition of smaller publishers and a continuation of their current moneyhat strategy. They aren't going to blow the $70 billion irrationally on a shopping spree because they're 'unhappy'. Hypothetically, in a scenario where this deal doesn't go through, they would likely court other big publishers- namely Take Two.
My main point however, was that you're framing the whole issue illogically, these corps don't have feelings, and Microsoft has been going after Sony where it hurts, nothing has or will change there.
Not in the context of the change I was talking about.
Yeah of course. That's obvious, but look at the landscape, outside of an EA or Take Two deal, the effect of a shopping spree of smaller publishers is minimal, considering it's unlikely MS will go after a Japanese publisher. Also, Microsoft made clear they aren't finished with acquisition even after the AB deal, they will likely continue to acquire smaller studios, regardless of this outcome.
